Monthly savings
$438
Is refinancing worth it?
Closing costs cut into the savings, and restarting your loan term can cost more over the life of the loan. This calculator shows both, so you can see whether a refinance is worth it now.
Your current + new loan
Updates live
Your current loan today
Remaining balance
$450,000
$
Current rate
7.25%
%
Months remaining
312 mo
mo
26 years remaining on your current loan
New loan offer refi
New rate
6.25%
%
Closing costs
$8,500
$
New loan term
How long will you keep the loan?
How long you'll stay matters more than any other input. If you sell or refinance again before break-even, you lose money on the refinance.
The short answer
Worth it
You'd save $438/mo
You'd save $438/mo
and break even at month 20.
You're planning to stay 7 years (84 months). Break-even at 20 months means you'd net about $28,289 in payment savings over that time, after recovering closing costs.
Break-even
20 mo
Break-even timeline
20 of 84 months
Closing
Break-even
You move
Keep current
Monthly P&I$3,209
Remaining interest$551,112
Total over remaining$1,001,112
Refinance to new loan
Monthly P&I$2,771
New loan interest$547,462
Total over new term$997,462
!
Watch the term reset
Going back to a 30-year term means you're paying interest for 4 more years than you would have on your current loan. Even with a lower rate, total interest over the full new term ($547,462) isn't much less than what's left on the current loan ($551,112). The savings come from monthly cash flow, not lifetime interest.
Common refinance questions.
Why does "term reset" matter? +
If you're 4 years into a 30-year loan and refinance into a new 30-year, you've added 4 years of interest payments. The monthly savings are real, but the lifetime savings often aren't. A 20-year refinance gets you the lower rate while keeping roughly the same payoff date, and you pay less interest overall. We always model both.
What's a realistic break-even? +
Most healthy refis break even between 18–36 months. Under 24 months is very good. Over 48 months means closing costs are taking most of the value, usually because the rate drop isn't large enough or the costs are high. Always ask the lender for an itemized breakdown.
What if I'm not sure how long I'll stay? +
This is where most people get burned. The break-even calculation assumes you keep the loan; sell or refi again before that, and your closing costs were unrecovered. Rule of thumb: if there's a real chance you'll move in under 5 years, the break-even has to be under 24 months for a refi to make sense.
Should I roll closing costs into the loan? +
Sometimes. It preserves cash, and the math can still work if the rate drop is large enough. But you're paying interest on those costs for 30 years, which raises the true break-even by 6–12 months on most files. Pay out-of-pocket if you can, and confirm the no-cost vs. cost-in scenarios both before signing.
What about cash-out refis? +
Different math. The break-even concept still applies to the rate piece, but you also need to model the new debt's cost vs. what you're using the cash for, such as a renovation or paying off higher-rate debt. We model all of it before making a recommendation, including whether a HELOC would work better than a cash-out refinance.
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Estimates only. Break-even math is an estimate and not a guarantee. Actual closing costs, rate offers, and tax implications depend on your full file. Not a commitment to lend. Buku Lending, Inc. · NMLS 2113850 · CA-CFL 60DBO-135330. Licensed in CA, CO, FL. Equal Housing Opportunity.
This refinance looks worthwhile to me. Rates and closing costs vary between lenders, so I'd compare a few before you lock.